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Yes Bank Profit Jumps 34%, Yet Shares Tumble
21 Jul
Summary
- Yes Bank reported a 34% year-on-year net profit increase.
- Despite profit growth, Yes Bank shares experienced a 4% decline.
- Brokerages maintain 'Reduce' ratings, citing concerns.
In the first quarter of fiscal year 2027, Yes Bank announced a significant 34% year-on-year increase in its standalone net profit, reaching Rs 1,071 crore. This rise was accompanied by a 17.5% growth in net interest income (NII), which amounted to Rs 2,786 crore for the April-June period.
Despite these positive financial indicators, the market reaction was subdued, with Yes Bank shares declining by 4% on Monday. Analysts pointed to factors such as higher provisions, slower asset recovery, and staff costs as reasons for the profit missing estimates. Non-performing assets saw a sequential rise, although gross and net NPA ratios remained low at 1.3% and 0.2% respectively.
Brokerage firms Nuvama and JM Financial expressed caution, maintaining 'Reduce' ratings on Yes Bank shares. They highlighted concerns regarding core profitability and the uncertainty surrounding future asset recoveries, despite an overall improvement in core operating trends. Both firms set a target price of Rs 22 per share, suggesting a potential downside from the stock's current trading level.
